The big issue we face as we start the week is the technical pattern of the indices.

Anyone that has traded this market in recent years knows that buying the dip on news of bombing or terrorist action has been a good move. Market players immediately dismiss any fear or worries that these events may create.

In the case of the Syria bombing on Friday evening the market reaction was immediately positive. The event was already well anticipated and even though there is the usual political arguments over the ramifications of the event, there isn't any glaring negative that is worrying the market.

In addition to the positive reaction of equities, oil is down, precious metals are softer and bonds have weakened. All of the defensive plays have reversed.

The one problem the bulls may face here is that the reaction of the market is almost too predictable. This is just an automatic reflex at this point and market players are going to quickly move on to other matters.

The big event this week will be earnings. We have a couple more banks this morning, but things will heat up tonight when Netflix (NFLX) reports. There has been a slew of estimate increases for NFLX recently but, like the other FAANG names, it is still off its all-time highs. It will be a good test of market sentiment after the relentless focus on Action Alerts PLUS holding Facebook (FB) privacy last week.

Tomorrow we have Action Alerts PLUS holding Goldman Sachs (GS) and IBM (IBM) reporting, and major reports will continue to roll in the rest of the week.

Also this week we have quite a bit of jibber-jabber from various Fed members. The incoming head of the New York Fed, John Williams, is giving a speech on Tuesday and quite a few other members are on the agenda as well.

The market has not been too worried about increased hawkishness of the Fed lately. Bonds have inched up on concerns about slowing growth, but earnings season is going to impact this to some degree as we start hearing more about forward guidance. Bonds are weaker this morning as the desire for a 'safe haven' is reversed after the resolution of Syria.

The big issue we face as we start the week is the technical pattern of the indices. The S&P 500 has been in a trading range but looks ready to regain most of what it lost on Friday if futures hold up. The S&P 500 is still under the key 50-day simple moving average of 2690 and faces plenty of technical overhead.

The character of the price action has shifted this past month with the indices unable to generate sustained upside momentum even on good news. The buyers are providing support but they are not chasing and the market is more sensitive to negatives. As long as the S&P 500 holds the 200-day simple moving average of 2600 we are in OK shape but if that level is tested again there are going to be some very nervous bulls.

Bank of America (BAC) put up good numbers but the reaction of banks to earnings have been worrisome. We'll see if there are some 'value' buyers today.

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At the time of publication, James DePorre had no position in the securities mentioned.

A flush of FX outflows threatens a breach of the 7 level vs. the dollar, and commodities will likely follow suit.

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